The risk with insurance policies is that people see it as a ‘set and forget’ arrangement and can cause headaches and issues down the track, says Financial Adviser Margot Lensen (nee Robinson), a Financial Adviser at Cambridge Partners. Before joining the team, Margot spent four years as an Insurance Adviser at Crombie Lockwood. Margot is no longer an insurance adviser, but she has provided six handy tips covering the most common insurance in this article.
Tip 1 – Home Insurance
With the cost of building skyrocketing in the past years, rebuilding your home may cost more than when you first took out your insurance. Some online calculators can help, and most insurers will have their own that they can send you. Check with your insurance adviser if your policy will cover the rebuild or if it will only pay the specified sum insured.
Tip 2 – Contents Insurance
As people accumulate wealth, they often spend more on everyday items without realising how this could impact their contents insurance. New mountain bike? New jewellery? You may be required to individually specify these in your policy. Reviewing the sum insured for your contents cover every few years is worthwhile to ensure you have factored in any upgraded or new purchases.
Tip 3 – Private Medical Insurance
With the cost of medical insurance increasing, this is a policy that many people would like to have their premiums reduced. One way to do this is by increasing the excess. Self-insuring the excess of your policy can assist in bringing your monthly premiums down to a manageable level. If you have an emergency fund of $2,000, for example, increasing your medical insurance excess from $0 to $2,000 can significantly reduce monthly premiums.
Check your medical policy to see if it includes non-Pharmac-funded drugs. Some insurers include this automatically; many don’t. In the event of a claim, learning that you are not covered for the medications your health professional has recommended can be a nasty surprise.
Tip 4 – Income Protection
Income Protection Insurance and Mortgage Repayment Cover can be pricy, but very important for many households.. Still, it is worth understanding that there are more triggers you can pull to reduce premiums than just reducing the overall sum insured. Suppose you are in the position to do so. In that case, increasing the waiting period – how long you need to be off work until the policy kicks in, or reducing the payment period – how long the policy will pay for, will also assist in lowering premiums.
Tip 5 – Lump Sum Covers: Life, Trauma, or Total Permanent Disability Insurance
These policies generally go up with the Consumers Price Index yearly, and the sum insured is often linked to debt or replacement income. Trauma and Total Permanent Disability insurance can be a standalone or accelerated benefit, meaning that the claimed sum will come from your life insurance. Depending on your policy, this will impact total premiums. It is essential to review these regularly with your insurance adviser to make sure the cover is appropriate for your situation.
Tip 6 – If you have experienced a medical event recently
If you have been diagnosed with a medical condition or experienced a medical event, you may wonder how this could impact your life and health insurance. When applying for new cover, it is important to inform your insurer about this, as non-disclosure will only result in disputes and disappointment at claim time. Speak to your insurance adviser regarding reviewing exclusions or loadings that insurers may have offered, or any possible claims after medical events.
Summary
It’s important to review your insurance policies periodically with an insurance adviser to ensure your policies are comprehensive and fit for purpose. They can also ensure you pay the right amount for the cover you need. Talk to me today if you need help finding an insurance adviser.
By Margot Lensen, Financial Adviser, Cambridge Partners
30 May 2023
Disclaimer: This article is general information and does not consider your situation and does not constitute personalised insurance advice. The information expressed is the author’s opinion without the assistance of OpenAI. There are no warranties, expressed or implied, regarding the accuracy or completeness of any information included in this article. For specific insurance queries we recommend you speak to an insurance adviser.